JIM LEHRER: Speaker Hastert says he feels remorse over what happens about the stimulus package, how do you feel about it?

SEN. TOM DASCHLE: I think this is a good word. I’m disappointed we weren’t able to put the kind of compromise together that I thought was within our reach. There needed to be more give. There wasn’t and that is unfortunate.

JIM LEHRER: He says there were votes, there were enough votes in the Senate to pass the Republican version that passed the House this morning, but you just wouldn’t put it to a vote. Is he right?

SEN. TOM DASCHLE: Well, Jim that was exactly our situation several weeks ago. There were enough votes to pass the Democratic bill, too. The problem is that when you have controversial legislation it’s subjects to a 60-vote threshold. Our bill didn’t reach that threshold several weeks ago. Their bill didn’t reach it today. That is the disappointment really. I thought there were many occasions when we could have found that agreement. It just wasn’t, it wasn’t to be.

JIM LEHRER: But he was right. I mean, there was a majority in the Senate for the bill; just not the 60 votes, the two-thirds required to… for procedural reasons, correct?

SEN. TOM DASCHLE: Well, I don’t know. There were a couple of Republicans and a couple of Democrats whose positions were a little unclear. But without a doubt, I think there could have been a good debate. The problem is, of course, there wasn’t adequate time to complete our work prior to the end of the week. And of course, we had some very grave concerns about some of the features in this so-called compromise bill, especially its cost, its unfairness, and the little help it provided unemployed workers.

JIM LEHRER: Are you not concerned about the fact that people are going to say, “Well, Daschle wouldn’t even put it to a vote to find out whether or not that it could get a majority”?

SEN. TOM DASCHLE: Well, I think that we were definitely prepared to have votes. The problem is we weren’t able to get the 60-vote threshold that is required in legislation of this controversy. We’re prepared to support a lot of what the Republicans had proposed. The unfortunate thing is they weren’t as willing to support the kinds of things that we felt we needed to be able to reach an agreement. We were prepared to support something. We weren’t prepared to support just anything.

JIM LEHRER: When you say “required,” just to make sure we understand what we’re talking about here, that’s required if somebody raises procedural points to avoid a up-or-down vote… up-or-down majority vote, and that’s what you think would have happened in this case.

SEN. TOM DASCHLE: That’s right. You had some very controversial issues. Do we really want to spend, for example, $211 billion of Social Security and Medicare Trust Fund money to pay for an economic stimulus package? Jim, that was three times what the Republicans and Democrats had agreed to just a few weeks ago as to what the package would be. Do we really want to spend that money in the form of repealing the alternative minimum tax for the largest corporations in the country? That too is something that we didn’t think justified support. So there are a number of issues, very controversial, that generated the kind of attention, the kind of clear debate that you would have on an issue of this import.

JIM LEHRER: Now, Speaker Hastert said several times that this was… That the House version was a compromise negotiated by centrist Democrats as well as Republicans. You take issue with that?

SEN. TOM DASCHLE: Well, there were compromises along the way, but I don’t think it represented the kind of compromise that we thought you had to have in order to get the kind of agreement that can pass. As I said several weeks ago, you really needed two-thirds in both caucuses to be able to pass something under these conditions, and that wasn’t met. We didn’t have two-thirds in our caucus because of the AMT, because of the accelerated rate reduction, because of the cost, and really because we didn’t treat unemployed workers with the kind of fairness and sensitivity that we felt was required.

JIM LEHRER: He said that you are hamstrung by the far left of your party, and you have to be careful what you do because of that.

SEN. TOM DASCHLE: Well, I guess… I’m not going to get into finger-pointing and that kind of allegation. I… You could make the very same case about the far right in the Republican caucus, but that doesn’t get us anywhere. I could say that they are captives of the far right and that they’re victims are their own right-wing ideology. That isn’t the kind of positive, conciliatory language that I think we really need if we’re going to get the job done. I would like to come back whenever and make sure that we continue to work to find an agreement. I think it is within our reach. We have got to keep working until we are successful.

SEN. TOM DASCHLE: Well, because of those features that I’ve already articulated. We didn’t have agreement on those. Democrats can’t support the permanent repeal of the AMT.

JIM LEHRER: AMT — explain why that is a problem.

SEN. TOM DASCHLE: The Alternative Minimum Tax. There were…

JIM LEHRER: Why… Why? Why can’t you support that?

SEN. TOM DASCHLE: We can’t support it in large measure because we think there ought to be fairness– that everybody ought to be willing to commit a certain amount of their income to the responsibilities of citizenship in this country. Whether it’s a corporate entity or an individual, there ought to be some minimal responsibility for us pay to our fair share. It doesn’t make a lot of sense, first, to borrow Social Security and Medicare dollars, and then to give away tax breaks to those who pay no tax whatsoever. That just didn’t seem very fair to most Democrats.

JIM LEHRER: Now, some people have suggested, increasingly in the last few days, that this was all kind of a phony debate– that in the final analysis, because it was three months ago when this whole thing started, that whether they had passed your version, the Democratic version, or the Republican version, that neither one were going to make any difference as far as stimulating the economy. How do you respond to that?

SEN. TOM DASCHLE: Well, I don’t know that anybody can say with authority that this will stimulate the economy. I do believe that we think in most cases that it can’t hurt, unless you do things that are just wrong. If we exacerbate the debt, if we borrow money from Social Security and Medicare in ways that are problematic for the trust funds, if we create longer- term interest rate hikes down the road because of our lack of fiscal prudence– if we do those kinds of things, I think that we ought to be subject to criticism. So I think we have to be careful about that. But I think the bottom line was if we did this right, most of us believe that you will have some positive effect on stimulating the economy.

JIM LEHRER: Now, when you say “do this right,” you mean, “do it the way you Democrats wanted it done”; is that right?

SEN. TOM DASCHLE: No, that’s not right at all. We had already agreed with the Republican proposal on accelerating bonus depreciation, on… We took the Domenici proposal on payroll tax holidays; we’ve agreed to a number of things: A tax credit for healthcare coverage. There were a lot of recommendations made about Republican and Democratic proposals that showed movement, and I felt good about that. We felt we needed a compromise. We were prepared to do so on a number of things that were quite painful for us. But the bottom line was you can’t go all the way and give up the principles upon which you believe really guide you in situations like this.

JIM LEHRER: Now, Speaker Hastert goes through a list of things that he says the Republicans gave to you all in terms of compromise, but you wouldn’t go… But it wasn’t enough. Every time they wanted… He would give in, you wanted more and more and more.

SEN. TOM DASCHLE: Well that… I think you are going to get that back-and-forth as long as this debate goes on. I will acknowledge they were willing to show some movement, but I don’t think they were nearly where we were with regard to the willingness that we demonstrated in coming to the middle and making some very hard compromises, some things that we felt that… were not necessarily things we felt were good public policy, but in the name of trying to reach an accomplishment, a compromise here that we could live with, we were prepared to do that. Unfortunately we just didn’t get the kind of movement on the other side that made the difference.

JIM LEHRER: What should the American people make out of all of this? I asked the Speaker the same question. September… Both of you were on our program shortly after September 11, and a lot of talk about bipartisanship, corporation, a new spirit alive in the Congress, and yet we sit here three month later and you all can’t even get together on stimulating the economy.

SEN. TOM DASCHLE: Well, I wouldn’t minimize the difficulties in getting together on economic policy, Jim. You know, we agreed on a lot. We agreed on airport security and airline bailouts, and counterintelligence, and we… counter-terrorism. We agreed on the use-of-force resolution. We’ve agreed on a huge supplemental; we just agreed this week on a major rewrite of the Elementary and Secondary Education Act. We have agreed on a lot. But as you know, when it comes to economic policy, you get to the very heart of what our parties are about. There are some fundamental differences, and it does take a good deal of effort to overcome philosophical and ideological impediments that are there historically and traditionally and philosophically that are of real consequence. That is what we tried to do here.

JIM LEHRER: Congressman Armey… Now, I asked Speaker Hastert about this, and he didn’t take the bait, but at any rate, Congressman Armey suggested that you are being guided now, by what you do as Senate Majority Leader, by the fact that you have decided to challenge President Bush for the presidency in the year 2004, and that is what this is all about.

SEN. TOM DASCHLE: Well, Jim, I know that Dick Armey knows a lot of things, but the inside of my mind is something that I doubt very much that he or anybody would know. I haven’t made any decisions politically, and I don’t intend to. That isn’t exactly a motivation for me or for anybody at this point. I think we’ve got to do the right thing, and the right thing has nothing to do with Presidential politics; it has nothing to do with elections. It has to do with exactly what we believe in and what we think is the right public policy for this country at a time of great need. I think we’ve got to come together; we’ve got to quit the finger-pointing, the accusations, the political polarization, and see if we can get this job done. I’ve made a commitment to do that, and I would hope the other side would as well.

JIM LEHRER: What do you make of Vice President’s Cheney suggestion that you are on obstructionist?

SEN. TOM DASCHLE: Well, again, those characterizations aren’t very helpful. I try not to let them get in the way of our need to work together, our need to try to talk and communicate, cooperate. But obviously those things don’t help.

JIM LEHRER: What about the outsiders, some of the commentators and the columnists and editorial writers are saying that what’s really at work here is a kind of a contest of wills between you and President Bush. Does that make sense to you?

SEN. TOM DASCHLE: It doesn’t have to be contest of wills. The President and I have a cordial relationship. We recognize that there is a need to work together on these things if they are going to be accomplished. As long as I’m Majority Leader and he is President, there is no other choice but to try to find common ground. I want to do that. I think in some cases the administration wants to do that.

JIM LEHRER: Speaker Hastert… I think anybody who saw the interview just now with speaker Hastert would have to… Any fair-minded person would say he is a little exasperated with the United States Senate in this moment, in terms of cooperation, and he kept saying, “We have legislation that… We had it at the door of the Senate; the Senate won’t take it up,” et cetera– then of course the stimulus thing. Do you think he has reason to be exasperated with the US Senate right now?

SEN. TOM DASCHLE: Well, I guess I would go back to a lot of bills that we’ve passed that haven’t been acted upon in the House. We all have our lists of examples. I would go to the campaign finance reform bill. You know that has been pending for months, and I’m exasperated that that legislation hasn’t been passed. I’m disappointed it hasn’t been passed. You know, it’s supported by a majority of the members of the House, and I could use the very same arguments used by some House leadership today about situations involving legislation here in the Senate, on that very issue and others. And so we have to be very careful, very wary about this tendency to be accusatory and to point fingers. What we’ve got to do is try to find a way to work together. I hope I can do that. I’m just as hopeful that House leadership can demonstrate that too.

JIM LEHRER: Finally, the nominations issue. Eugene Scalia to be Labor Department Solicitor; Otto Reich to be an Assistant Secretary of State. In both those cases, you said they are not going to come to a vote. Why is that?

SEN. TOM DASCHLE: No, I think what I’ve said, Jim, is that they are not going to… It is not likely that they’re going to pass because I don’t think the votes are there. There will be votes on a relation to these nominees. In some cases with controversial legislation, as we’ve just indicated, or with controversial nominees, it takes a super majority. That is what the Founding Fathers expected of us. That’s what they designed into our system. And so those super majorities will be required anytime you have a controversy reaching this level. And that certainly involves Mr. Scalia and Mr. Reich, and so I would expect that we’ll have votes eventually, and my guess is that neither of them have the votes today to be successful.

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